Community Leaders Ignored Red Flags and Gave a CEO Millions to Buy Their Hospital. Now He’s Ghosting Them

Getting your Trinity Audio player ready...

At California-based Prime Healthcare, Mike Sarian was in charge of scouting nationwide for hospitals in or near bankruptcy to buy and revive. When he started in 2012, he oversaw 12 hospitals. By the time he left in 2020, his portfolio had grown to 46. 

He started his own company, American Healthcare Systems, and set out to replicate the Prime playbook.

Sarian’s first move was buying Asheboro’s only hospital, Randolph Health, which was bankrupt. “We will honor all obligations—fully,” Sarian assured a bankruptcy court in October 2020, when his offer was selected as the winning bid.

County leaders were desperate to save their hospital, which had been a nonprofit. They extended Sarian a $12 million loan in 2021, which they planned to forgive, to sweeten what had been a messy deal. 

Sarian, who lives in the Los Angeles area, now owns 19 hospitals in five states across three companies. But his critics, including those in North Carolina, say he’s left a trail of unmet obligations.

Randolph County asserts he’s broken several agreements tied to the loan it gave him. The county wants Sarian to return $11.3 million of the $12 million, but it has little leverage to get the money back. 

Sarian expanded his operation while at least 10 vendors in various states said his hospitals didn’t pay their bills, court records show. Major lenders recently sent him default notices totaling more than $100 million. 

The 68-year-old Sarian, who was born in Lebanon and immigrated to the U.S. as a teenager, has a doctorate in public health and describes himself in his LinkedIn profile as “one of our nation’s top CEOs in health care industry.” He says his companies offer a vital service that few others are willing to provide: keeping hospital doors open while minimizing service disruptions.

“Did I do everything right? No,” he told The Assembly. 

In a lengthy interview, Sarian was penitent yet resolute. He acknowledged his companies grew too quickly but said it was tough to bypass a good deal when it arose. “Maybe in retrospect,” he said, “I should have taken maybe another year or so.”

That growth spurt resulted in unpaid bills and a wave of litigation. Sarian denies that the financial challenges ever jeopardized patient safety and says his businesses have employed thousands while ensuring that acute care remains available to vulnerable communities. 

“These were hospitals that people did not want,” he said. 

That was true in Randolph, a county of about 150,000 people in the central part of the state, best known as the home of the North Carolina Zoo. 

Records also show desperate community leaders went to bat for Sarian after an independent committee flagged financial and legal concerns. 

They didn’t have much of a choice. 

Rural hospitals are declining as the health care landscape has transformed. Since 2005, North Carolina has seen the third-highest number of rural hospital closures: Eight have stopped inpatient services altogether. 

Many are dilapidated and oversized, losing patients as their towns’ slower-growing populations drive farther for higher-quality care. Across the country, local communities have begged buyers to rescue their vulnerable hospitals from a cash-burning spiral. 

Owners like Sarian, who can acquire dying hospitals for almost nothing, are eager to be their saviors. But skeptics say community leaders should be wary of faraway suitors who might promise more than they can deliver.  

Bankruptcy Woes

A city bond and private donations helped build Randolph Hospital, which opened in 1932. The art deco building, which hugs a charming piedmont downtown, helped spur economic opportunities. 

In the near century that followed, the hospital strained to modernize as better-resourced peers outpaced it. Some sections became obsolete. Only about half of its 145 licensed beds were in use as of 2021, and daily occupancy fluctuated between 30 and 50.

Though the hospital’s sparkle has faded, it remains one of the county’s top employers, ahead of the Zoo, a 15-minute drive away. The next-closest emergency room from the Zoo, which draws 1 million annual visitors, is 40 minutes away, depending on traffic.

Randolph County is growing, but slowly. Three out of every four people seen at the hospital get their health insurance from government-backed programs that cover low-income or elderly patients. Payment rates for these patients have flattened as the government tries to keep costs down.

Randolph’s leaders hoped to latch onto a stronger system to survive but floundered in luring a buyer. 

Three deals fell through. No neighboring hospital systems were biting. They were all concerned by Randolph’s debt, which had mounted as payments increased annually from a 2007 hospital bond of $49 million. 

To avoid closure, Randolph Health—it was renamed in 2017—filed for bankruptcy in 2020, blaming waning patient volumes and regional competition. By summer 2021, Randolph Health was losing $240,000 a week, bankruptcy administrators reported to the court. 

Local officials needed to make a deal. Public money was essential bait. 

State lawmakers created the Rural Health Care Stabilization Program in 2019 to provide a low-interest loan to the county to help Randolph Health. The county wanted to offer a buyer a $20 million grant. As long as the new hospital owner agreed to certain stipulations, such as maintaining existing service levels, the county planned to repay the state on the new owner’s behalf.

The loan program tasks UNC Health, a nonprofit system owned by the state, with reviewing and making recommendations; the state’s Local Government Commission, which oversees public financing deals, has the ultimate say. 

A UNC Health committee found Sarian’s plans unrealistic and flagged questions about his past. It recommended that the state deny the county’s loan request. 

“Did I do everything right? No.”

Mike Sarian, CEO of the company that owns Randolph Health

When Sarian was president of Prime Healthcare’s hospital operations, the company settled Medicare fraud allegations for $65 million. The UNC committee worried his plans for Randolph Health sounded too similar to strategies prosecutors alleged Prime had used. 

Behind the scenes, records show public officials quietly quelled those concerns. 

Committee representatives met with Sen. David Craven Jr., a Randolph County Republican, and state Senate leader Phil Berger’s chief of staff at their request the following week, according to correspondence obtained by The Assembly. They asked the committee to reconsider. (Neither lawmaker returned multiple requests to comment.)

The committee was unswayed and upheld its recommendation in March 2021. The county lowered its request from $20 million to $12 million, an amount the Local Government Commission found more tolerable. The Commission approved Randolph County’s request but required the company to provide the county with more representation on the new hospital board.

Later that month, Sarian filed written testimony in a different federal fraud case. Prosecutors accused Prime of a kickback scheme by overpaying a cardiologist to close his practice so he could refer patients to one of its nearby hospitals. Sarian helped see the transaction through but denied wrongdoing. Prime paid $37.5 million to settle the case.

When asked for his vision for Randolph Health, Sarian told the bankruptcy court that he planned to open a 40-bed psychiatric unit to fill an empty floor. That never happened. Sarian said it turned out to be more expensive than he had planned.

He also told the court he owned 100% of his startup. Months later, after Sarian faced questions about financing the acquisition, the county wrote in its revised loan application that there could be minority investors, but that Sarian would remain majority owner. 

That didn’t happen, either. 

Company documents reveal Sarian initially owned the startup equally with a business partner, Dr. Aramais Paronyan, who was arrested for Medicaid fraud in 1998. Paronyan paid the government $10 million in 2004 to settle the case. 

In 2024, a managing director of Texas Capital Bank emailed Sarian to say he had looked into Paronyan. “We cannot do a financing if he is involved, nor do I think could another bank or nonbank,” the banker wrote. 

Sarian said any ownership representations were filed by his attorney. “It should have been disclosed,” he said. “It was not disclosed.” 

He said he partnered with Paronyan to offset his risk in purchasing the hospital. He said he wasn’t scared off by Paronyan’s past because of his own experience dealing with government probes. Sarian became majority owner, with 51%, in 2022.

The state Attorney General’s Office issued a letter saying it did not object to American Healthcare Systems buying Randolph Health. A spokesperson said that the office’s authority to review hospital transactions is limited and that it based its review of the transaction on “the information the parties gave us being complete and accurate at that time.” 

American Healthcare Systems won the $10.2 million deal in a bankruptcy auction. Bankruptcy Judge Lena James questioned whether the bidding process actually resulted in a fair winner, or price.

“I mean, there is no alternative but AHS at this point,” she said at a June 2021 hearing formally approving the deal. “It’s better than nothing.”

Frozen Bank Account

In the years since, American Healthcare Systems and its affiliates are alleged to have routinely ignored invoices as they expanded into other states, according to regulatory inspections, bankruptcy proceedings, and more than a dozen lawsuits. At some hospitals, suppliers have refused to provide medical equipment. At least one hospital canceled or delayed scheduled surgeries because doctors hadn’t been paid for months. 

And that was all before a falling-out earlier this year among the companies’ top brass. In various lawsuits, three executives, including Sarian, have swapped accusations of moblike maneuvers, corporate sabotage, and fraud. 

Two of the executives accuse Sarian of pilfering a combined $53 million from American Healthcare Systems between 2021 and 2025 and moving the money into entities he controlled, while flouting the firm’s payroll tax liabilities. They depict Sarian’s financial shuffling as fraudulent; he counters that the moves were ordinary and authorized. 

The companies’ boards fired Sarian in February. He accuses his former colleagues of orchestrating an illegal coup. District judges in Florida and California have sided against Sarian, blocking him from regaining access to two of his three companies. He retains control of the company that includes Randolph Health, though this is in dispute.

On March 25, Wells Fargo froze Randolph Health’s bank account because it could not determine who was in charge. Sarian said it was reactivated late last month. 

“It’s hard to be part of a community you’re not in.”

David Allen, Randolph County commissioner

He said he has given up trying to regain control of the other companies, even though he remains majority owner of all three. 

In March, Sarian fired Randolph Health’s CEO, Tim Ford, and had a California-based financial officer escorted out of the hospital by security. Sarian said he dismissed them for being disloyal and aligning with his former business partners. 

“They were in cahoots together trying to take over the hospital,” he said. 

Ford and Sarian’s former business partners could not be reached for comment. 

Sarian named a new CEO for Randolph Health last week, Kevin Spiegel. In a whistleblower lawsuit the U.S. Department of Justice joined in 2024, prosecutors allege that Erlanger Health System, the owner of six hospitals in Tennessee and one in Murphy, North Carolina, pursued a fraudulent kickback scheme after it hired Spiegel as CEO beginning in 2013; the hospital vigorously denies the allegations.

Quality Concerns

Surrounded by dated, floral wallpaper and windows framed in salmon-colored drapes, Renell Fields snuggled her third baby, Oakley, after she gave birth in 2024. 

She calls Randolph Health’s maternity rooms “grandmaw chic.” Except for the modest flat-screen television, they probably looked much the same as when she was born there in 1989. 

Oakley was having trouble feeding, and nurses were concerned. She said a physician visited and confronted her. “What kind of drugs are you on?” Fields said she was asked. “I wish that we could drug test y’all throughout your pregnancy.” 

Oakley needed a swallow test performed, a screening most advanced hospitals can arrange. But Randolph Health’s specialist didn’t work weekends. Fields says her nurse told her the issue was “above our pay grade.”

The remark snapped Fields into action. She quickly arranged for Oakley to be transferred. Fields, a lifelong Asheboro resident, said most people know to drive a little farther for anything serious. 

“I wouldn’t send my dog there,” she said.

Randolph Health is assessed quarterly by an outside nonprofit. The hospital’s safety grades have bopped around since the acquisition, once earning an A in fall 2024, but otherwise earning B’s and C’s. 

Soon after the acquisition, regulators cited the hospital for “immediate jeopardy,” the most serious risk assessment for conditions that could pose serious injury, harm, impairment, or death. 

Inspectors found pregnant women who arrived with symptoms like high blood pressure, urinary bleeding, and abdominal pain weren’t seen by an obstetrician. 

The same month, in August 2021, regulators also cited the hospital for failing to stabilize a 63-year-old unresponsive patient with kidney disease. He died after being turned away because the hospital was full and lacked dialysis equipment. 

“I don’t want to downplay it, but I think these things happen in every hospital,” Sarian said. “For an outsider, ‘Wow, immediate jeopardy, that means the whole hospital is falling apart!’ That’s not the case.” 

After losing his first wife to cancer 16 years ago and his mother earlier this year, Sarian said he has a reverence for the patient experience and preserving access to quality care.

In 2024, American Healthcare Systems added inpatient dialysis. And last year, it opened a cardiac catheterization lab, staffed and operated by Novant Health.

Regulators again cited the hospital for deficiencies last year after it denied a catheter to an 83-year-old man who had prostate swelling and couldn’t urinate. He left and went to an urgent care center, only to be told to return to the emergency department. When he returned to the ER, he said his pain was 10 on a scale of 1 to 10, but he wasn’t immediately reevaluated. 

Three hours later in the waiting room, clinicians called his name. By that point, he had already driven to a different hospital.

Research is mixed on whether quality is negatively affected when hospitals convert from nonprofit to for-profit ownership. 

Cory Cronin, a professor in Ohio University’s Department of Social and Public Health, studies for-profit hospitals. On average, Cronin said for-profit hospitals tend to assign nurses more patients compared with nonprofits.

Sarian said he hasn’t eliminated any jobs at Randolph Health, although he did fire the two executives in March. The hospital had about 1,200 employees when he bought it. 

Quality concerns and management issues have been more pronounced at Sarian’s other hospital properties. 

After acquiring Gateway Regional Medical Center in Illinois in 2023, American Healthcare Systems cut its staff’s medical insurance. Months later, a hospital in Missouri managed by American Healthcare closed; the company had planned to buy it.  

At Vista Medical Center in Illinois, regulators temporarily stripped the hospital of its trauma center status in early 2024. Some medicine was in short supply because of credit problems, and schedulers couldn’t get anesthesiologists to show up for surgeries because they hadn’t been paid in months. That summer, the firm closed the center’s freestanding emergency room, and it stopped maternity care in October 2025. 

In January, a 28-year-old patient died from hypothermia on Vista’s roof, found wearing only her hospital gown. Her family blames reduced staffing. 

Sarian denies that played a role but said he sympathizes with her family. 

“Hospitals are not prisons. We cannot keep people against their will,” he said. “Accidents happen.”

Distressed Hospitals

American Healthcare Systems’ primary lender is Medical Properties Trust, a private equity firm that has attracted Congressional scrutiny for saddling hospitals with convoluted lease-back arrangements. 

Medical Properties Trust sent Sarian an $85 million default note in February, asserting the firm had misused funds at hospitals in Florida and Texas. In April, the national lender KeyBank sent Randolph Health a default notice on a $50 million loan. 

Attorneys have repeatedly scrutinized the firm’s financial strategies in bankruptcy proceedings.

A lawyer for a subsidiary of U.S. Bank, which was owed money by a hospital system Sarian purchased, accused American Healthcare Systems executives of lying in 2023. The lawyer told a Texas court it was “beyond imagination” how the firm’s “no money down acquisition strategy” could actually work.

“I wouldn’t send my dog there.”

Renell Fields, Randolph Health patient

Jim Baker, executive director of the Private Equity Stakeholder Project, a nonprofit watchdog organization, said distressed hospitals attract private equity because the assets come “super cheap.” Most distressed hospitals rely on dependable government insurance payments, and Baker said investors likely know how to take advantage of these revenue streams. 

Courts and prosecutors often can’t put up much of a fight in scrutinizing the deals. “The only other option is either them buying it or the hospital shuts down,” Baker said. “It makes it easier for the deal to be approved.” 

Policymakers are inclined to help rural hospitals but haven’t settled on exactly how. Last year, the Trump administration set aside $213 million for North Carolina’s rural hospitals. But the requirements in that program are narrow, and not all struggling systems are eligible.

“We all thought that was going to be an answer,” said Republican state Rep. Timothy Reeder, who also works as an emergency physician in Greenville. “Very little of that money can be used for infrastructure.” 

The Rural Health Care Stabilization Act, which created the state loan program Randolph County used, was so tailored to Randolph Health that no other system has applied for the funds. 

Reeder filed a bill last month that would repeal and replace it. The new program would focus on infrastructure needs and open up requirements so other distressed hospitals could apply.

No Progress Reports

Randolph County commissioners hoped Sarian would use their money to spruce up the outdated facilities. But he received his first $3 million right after closing and instead covered operating expenses.

The board wasn’t happy about that but voted to forgive $1 million of the debt principal and $100,000 in interest in 2024. For the remaining $9 million, the county paid American Healthcare’s equipment vendors directly; the county wants Sarian to repay all of that money. 

Under the loan agreement, the company is required to supply the county with detailed quarterly progress reports. It never has. 

The state conditioned its loan approval on the county getting two seats on a newly created hospital board. But that board met sporadically, had no say in operations, and was given no financials to review. 

A spokesperson for the city of Asheboro, which has one seat on the hospital board, said it hasn’t met since April 2025. “I guess you could say, yes, we’ve got a seat on the board,” city manager Donald Duncan said, “but it’s a board that’s almost nonexistent.” 

Commissioner David Allen, who served on the hospital board, said they would often get a meeting notification with just a day or two’s notice, only for it to be canceled and never rescheduled. “It was like we were just there for the show,” he said. 

Allen described Sarian as an “absentee” owner. “It’s hard to be part of a community you’re not in,” he said. 

The county commissioners are in a prickly position. The county could put a lien on the hospital, but that leverage doesn’t amount to much when the end goal is to keep it open. “It’s a sensitive subject,” he said.

When the hospital converted to for-profit status, Asheboro and Randolph County each gained one of their biggest taxpayers, providing a combined $568,000 annually (the firm is current on these payments). By staying open, taxpayers save $2 million annually because paramedics don’t have to drive farther for acute care. 

Duncan was disappointed that no nearby systems would purchase the hospital, and he commended local politicians for rallying to secure public funding. “Had they not done that, we wouldn’t have a hospital there to be talking about,” he said. But he still thinks the hospital’s circumstances are a byproduct of “corporate greed.”

Despite the troubling corporate upheavals, Duncan said patients and employees aren’t making much noise. “Mommy and daddy are fighting,” he said. “But the kids are all right.” 

Last July, county commissioners sent Sarian a letter outlining what they believe are his various failures. It included three invoices seeking $3.3 million, representing its three $1 million payments plus interest, due immediately.

Sarian spent that summer advocating for Armenian causes, attending concerts and philanthropic galas, and bidding for more bankrupt hospitals, according to court records and social media posts.  

In September, he delivered a commencement address for a private Miami university, chartering a plane that charges a $20,000 daily minimum. In a Facebook post, he was pictured inside the cabin of a private jet, holding his baby in a Gucci bib, and said he was heading home after a great trip. 

As he’s ducked lawsuits, Sarian has maintained an upbeat and wholesome public image, advocating for his second wife in her run for the Glendale City Council, an affluent Los Angeles suburb. In a social media post last month addressing his critics, he said he’s earned every penny of his net worth, which he once estimated at $25 million. 

He never responded to the Randolph commissioners. He says he’ll set up a meeting soon.